In EMU exports are slipping faster than imports and that is keeping the trade deficit in negative numbers. This month
Imports fell a bit faster than exports but not by enough to flip the deficit into positive territory.

The sequential growth rates tell the story, as export growth rates slip from 18% to 2% to 1.5% over horizons of 12-Mos
to 6-Mos to 3-Mos, respectively. Exports are in a clear slowdown mode. Meanwhile, for imports the growth rates segueway from 23%
to 3% to then pick up to 13% over spans of 12-mos to 6-Mos to 3-Mos respectively. Imports tell a less clear story.

In EMU exports of foods manufactures and other goods are slowing. Raw material exports are accelerating largely because
of prices. Imports are declining for food and for manufactures, but the import decline for manufactured goods is less than the
decline for exports. Imports of other goods are rising. Raw materials, of course, are accelerating because of prices.

On balance the export and import growth rates both are slowing down so we can’t use the trends to say that we
more certain about growth. But imports are holding up better than exports and over three months the import growth
rate had picked up; that is something. Meanwhile as of December EMU export growth rates were down to a 1.5% annual
rate despite what has been strength from Germany.